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Nick Martin on how Wine Owners can help transform fine wine merchants

In his wide-ranging interview with Richard Siddle, Nick Martin (co-founder of Wine Owners) explains how it all started, and how our software as a service (SaaS) platform broadened as businesses approached us to solve their wine-specific challenges

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You might not know Wine Owners, but you will be familiar with all the prestigious wine names, merchants and fine wine brokers that it works with says Richard Siddle of The Buyer magazine.

In his wide-ranging interview with Richard Siddle, Nick Martin (co-founder of Wine Owners) explains how it all started, and how our software as a service (SaaS) platform broadened as businesses approached us to solve their wine-specific challenges.

As a result we developed inventorying capabilities with 67 Pall Mall; a wine warehouse management solution with Western Carriers (one of the largest and most admired warehouses in North America); self-directed brokerage with The Wine Cellarage in New York; and the Hub wine merchant/ retail solution with a number of SME wine trading businesses.

Today our SaaS platform manages $2bn of fine wine, 19,000 inventories, 350,000 plus wine references and is used throughout Asia, North America and Europe.

In the interview we describe why our technology and systems are so well suited to the needs of the wine trade, how they can transform the day to day running of a wine business, the sorts of businesses who can benefit from the wide-range of software solutions provided, how to unlock business growth, and a check list of questions you should be asking yourself when evaluating what new software solutions are right for your business and level of ambition.

READ THE FULL INTERVIEW HERE

Read more: Solutions for Retailers, Merchants, Importers

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Should you be bending software into wine shape?

Should you be bending software into wine shape or going a de-risked route, of a core business platform that’s specific to the business of wine?

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ERPs from the major vendors are supposedly easy to configure and to run. Yet configuration quickly turns into customization. Customization turns into compromise, and scope creep racks up the fees because business analysts rarely get on top of enough detail up-front to scope the work involved accurately enough. So you end up paying for a changing scope. The question you need to ask is: do I bend major vendor ERP software into wine shape or go a de-risked route with a business operating platform that’s specific to the business of wine?

Software as a Service (SaaS) should be a great thing. It reduces cost of ownership, improves availability and security, keeps you up to date with the latest version, gives you access to road-tested new features and makes the notion of obsolete software obsolete! No more 8-10 year reinvestment cycles.

As software authors and providers have re-engineered for SaaS and make their older platforms obsolete, the pressure is on businesses to carry on with unsupported systems or bite the bullet and move.

ERP frameworks (stands for enterprise resource planning which in plain non-tech English means ‘the software that runs your business’)  and generic WMSs (warehouse management systems) are typically proposed by software houses who act as resellers as the way to go.

The world’s largest software vendors make a fortune from these one-size-fits-all frameworks in license fees, precisely because they’re supposedly easily configurable for any and every business. 

Except they’re not. Configuration quickly turns into customization. Customization turns into compromise. Compromise involves changing the way you run your business to fit in with global concepts of best practise. But best practise for a warehouse storing CPG products isn’t the ideal way to run a fine wine warehouse.

Software houses brim full of developers (who love coding more than configuring) like these ERP frameworks too because they can charge large sums and the configuration that becomes customization (that’s coding) turns the development cycle into an open check.

Meanwhile the software house’s business analysts are meant to grasp your business specificities in depth; at a level of granularity sufficient to enable a comprehensive business and technical specification to be formed. Except they rarely get into enough detail, because they don’t always know what question to ask relative to wine, or you forgot to mention something you considered so obvious that it wasn’t worth explicitly describing. 

So what’s the difference between configuration (in scope) and customization (out of scope)? It’s called scope creep, which is a deployment team’s way of saying it’s your fault (that’s right you, the customer) for not being precise enough in the first place. After all, you’re the one who “keeps changing the spec” and who “got bits wrong”.

ERP frameworks want to do everything. That would typically include accounting, marketing (CRM), e-commerce and so on. It would also include the functions you need to operate within your market, and it’s these that end up compromised and limiting your scope for business development.

Think about it: is a dedicated accounting system like Sage, Quickbooks or Xero like to be better or worse than an accounting function that’s part of an all-singing (but not necessarily dancing) ERP? Are specialist accounting businesses likely to be more complete, adaptable, quicker and cheaper to set up than an ERP? You bet. 

The thing is, in these halcyon days of APIs and web services, connecting best-of-breed platforms together is a lot easier than it used to be and enables you to pick the best of the bunch. Sure connectivity costs a bit, but it’s a small price worth paying to get the best set up for your needs. That set up would include core business functionality that’s specifically fit for your wine business, integrated with general business functions like accounting, marketing and e-commerce that are best of breed.

So back to the question: should you be bending software into wine shape or going a de-risked route, of a core business platform that’s specific to the business of wine?  That knows wine because it’s underpinned with one of the world’s best referential wine databases and associated rich content (and structured appropriately). That reflects and helps to redefine wine industry best practise. That streamlines processes rather than demands you conform to a generic high-level concept of best practise.

As one of our customers said to us recently: “we don’t want to adapt to software – we want it to adapt to us”. 

Learn more about our Software as a Service for the wine business

See also Industry specific SaaS

Bottle and glass of wine in shadow

MORE FROM THE BLOG

Evolution of Fine Wine Systems – From ERP to DOP (ft. research from Forrester Research)

How wine tech can help you win new customers and keep them happy (and make you happy too)

Data integrity in the fine wine market

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Featured

Data integrity in the fine wine market

The fine wine market suffers from poor data management and a lack of standardization of product descriptions.

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Visualisation of wine data

The fine wine market suffers from poor data management and a lack of standardization of product descriptions. The practical negative effects are many:

  1. A cause for private clients to think they have stored wines different to their actual stocks, resulting in the contingent liability of future claims on merchants and storage providers, not to mention loss of goodwill.
  2. Future mis-picks that have a cost to merchants operating private client reserves/ storage services and to storage businesses that suffer unrecoverable costs associated with redeliveries.
  3. A cause of trades that end up being cancelled due to incorrect wine descriptions, or due to insufficient detail (and lack of clarity), wasting time and in some cases causing compensation to be paid out to buyers.
  4. The potential impact on insurance premiums if claims are made to cover a liability.

Efforts have been made to create standards notably Liv-ex’s LWIN schema that aims to create an ISBN equivalent unique identifier, to help with systems interoperability. 

All such efforts are to be welcomed and do help, specifically when the data schema is open source.  Trade participants expect there to be certainty around continued open and free access to the base referential record, so unique identifiers are only likely to be adopted wholesale when they are freely available under terms that guarantee ongoing free community use. Open source unique identifiers can be monetised by information providers in the additional information that is connected to it, such as pricing, producer information, labels, other imagery, drinking windows, trend data and analysis.

Using unique identifiers to share product information between suppliers, and to recognize purchased or inbound wine correctly is helpful when wine names of the same producer and between producers with similar names is helpful.

Nevertheless it’s only half the answer. Fine wines do not inbound with industry standard barcodes, and wine still needs to be landed correctly. Team members typically charged with handling arrivals have some knowledge but are rarely experts. Variances between purchase orders and delivered wine are common. So an efficient landing wine process that improves accuracy of landing is essential.

Coming from a background in customer relationship management (CRM), data processing, and creating single customer views that draw on data from multiple internal and external databases, it was obvious that the challenges of name and address processing are not dissimilar to wine product name processing, albeit with some significant methodological adjustments required.

Best practice in wine warehouse management therefore starts with implementing an efficient workflow for receiving and identifying wine in conjunction with an underlying reference database and fit for purpose data processing.

Best practice data management essentials:

  • Properly structured data model that specifically designed for wine records, with a referential database and associated wine information related to each product reference.
  • Validation of all data fields at time of input as much as is practicable.
  • Wine-specific matching technology (with suitable ETL tools).

See also Wine data

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The changing face of fine wine retailing

There was once a time in fine wine retailing when to be a wine merchant meant being a stockholder; buying and paying for stock you owned to sell or to lay down.

Today there are two retailer archetypes firmly established: low stockholders and merchants who believe in the power of stockholding.

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There was once a time in fine wine retailing when to be a wine merchant meant being a stockholder; buying and paying for stock you owned to sell or to lay down.

So what changed? Simon Farr, co-founder of Bibendum before becoming Chairman of Cru World Wine and Oeno (and a director of Wine Owners) says: “the biggest thing that happened to fine wine over the last 40 years was that the rest of the world got rich. More wealthy individuals chose to consume and collect fine wine. Demand for fine wine increased. Supplies of the most sought-after wines didn’t – can’t. Scarcity drives up prices for in-demand wines. As the cost of wine rises, the pressure on working capital increases and drives a reduction in stock holding by the wine trade.”

These pressures have created a fragmentation of stockholders. The days of a single dominant market maker have gone. It’s difficult in today’s market to create the big fine wine franchises of the past, as purchasing power of merchants reduces. Margins in high liquidity markets have fallen and that’s exerted pressure on costs. 

Today there are two retailer archetypes firmly established.

The 2 archetypes of wine retailers

Firstly there’s the low stockholder model.

The whole world is moving to low cost, low inventory models. Wine is no different. We are seeing a re-examination of what it is to be a wine merchant, with a focus on low working capital intensity and low cost.

A low stockholder merchant or retailer doesn’t want to tie up precious working capital in wine, whether physical or as wine futures. Historically there’s been little or no specialism. The low stockholder wants to offer as many wines as possible and attract buyers who would otherwise find it hard to source the wines they want from local merchants or retailers.  

When the first generation of low (or virtual) stockholders first appeared in the 1990s consumer perception was of little value-add other than the very large database of wines, many of which were indeed otherwise hard to find. 

Whereas consumers wouldn’t have perceived a low stockholder as having as much knowledge as a traditional merchant, latterly technology has shifted that perception. Increasing transparency of market pricing has also helped the professional sourcer of stock, who of course is relatively unconstrained by what can be offered for sale. 

There are other constraints at play, nonetheless. In a perfect world the low stockholder needs accurate supplier feeds of inventory and efficient logistics. The reality is a little different. Few suppliers operate APIs (database-to-database feeds known as Application Programming Interfaces). Wine logistics and shipping is slow, and moving glass around comes with the risk of damage.  Sources of supply are scattered across different geographies. Wine sourced internationally can come with  different luggage tags and different packaging, whilst the desire to obscure sources can also obscure provenance. Then there’s the dreaded failure rate due to poor (or no) systems within sources of supply.

So in practise working capital that a stockholder might have put into stock gets spent on extra pairs of hands needed to compensate to deal with low volume, high value products. High administrative expenses end up being needed to operate this model. 

Liv-ex helps with that problem, because they do the heavy lifting in shipping wine, managing logistical risks and helping to manage buyer risk with their Standard in Bond stock designation. From nowhere else can you source as much virtual stock with the pricing transparency of comparing offer prices to last trades and using that data and other parameters to filter down to a manageable list. A Liv-ex feed of virtual stock is a no-brainer for a retailer committed to the low stockholding model, but doesn’t automatically solve the immediate challenge of market differentiation. As you’ll see, the low stockholding business isn’t alone in needing to figure that out.

Secondly there’s the merchant who believes in the power of stockholding. 

Today’s economics are favourable to stockholding businesses. The cost of capital is low and there’s a great deal of investor money looking for a home with a purpose and a stable return. Inflation is low. Arguably the opportunity cost for investors or business owners is low. Wine is a good store of value and stock builds in value over time. 

Notwithstanding those facts, returns on wine can take time, and value starts to rise only when stocks of widely available vintages sell through. 

A stockholder can’t offer the range that a low stockholding model promises. They are limited by availability to source and available capital, and so appeal to a narrower addressable market with a more limited range of wines.

But stockholders do have some advantages over their uninvested competitors. Stockholders can be much more efficient in their shipping costs given moving and storing wine is expensive and logistics is generally tricky. Certainty of stock availability means the failure rate is very low, and it’s easier to meet consistently high operating standards.

The nature of being a stockholder has changed in the last 30 years as a consequence of market transparency and higher prices. A stockholder needs better market insight and a clear sense of which stocks are worth buying into. Being a stockholder of high production, high availability wine that gets consumed slowly (such as classified growth Bordeaux) can be a struggle. The market overall is flat, Generation Y and Millennials are uninspired, and there’s limited scope for differentiation. 

Back to Simon Farr who I asked, how do you carve out a competitive advantage as a stockholder? “The edge is having a slow wine approach. To do that you need patient capital. I look at a 3-5 year holding period so that trade quantities of pristine stock can be offered at a more mature part of the life cycle”.

“Building a franchise with a clear position is key here. You have to find something that you can do better than someone else. Then you back your judgement and take positions in wines and categories that you believe in.” 

The new stockholders

Against the backdrop of a move to low margin/ low stockholding on the one hand, and increasing specialization among stockholders on the other, the question has to be asked, are collectors able to fill the stockholding inventory gap? 

Of course a substantial part of the secondary market is already represented by the consignment or broking of collector wines held in storage. We know of at least one, once-dominant, stockholder merchant who buys very little these days, because they have so much client stored wine that they’re able to leverage.

However as the low cost, low inventory model develops, and perhaps as the two archetypes begin to break down into a blend of sourcing strategies in the search for market differentiation, the collector stockholder will have much more market power than they may realise, especially with the potential challenges of VI1 forms post Brexit.

Individually, top collectors hold more stock than most merchants. There are a lot more large collections than you might imagine. Collectors buy a lot more wine than they consume, so their collections mature and they have the opportunity to become providers to virtual stockholders. Could collectors be the salt and pepper of virtual inventories, providing mature stocks and interest by which differentiation can be achieved? What’s been missing hitherto is an effective channel.  

The Hub market facilitation

The Hub business operating system (or ERP) for the independent wine market systematically supports these models, through its flexible approach to inventory management, workflow management and connectivity. 

Low or virtual inventory models must be able to inventory sources of supply, then sell, then purchase, as supposed to the more traditional workflow of purchasing, recognising as stock and then selling.

Stockholders need to manage and track inventory, ship stock cost efficiently, and decide what to sell, via which channel and when.

Both models need to manage client stored wines and all are trying to add value to the client offering in order to secure the right to resell those wines.

Hub connectivity makes it possible to create a unique blend of inventory feeds that can include multiple sources of supply including Liv-ex and private collections. The Hub makes possible a range of symbiotic industry relationships that would otherwise be difficult and precarious to establish and manage.

One thing’s for certain: the question of what it is to be a wine merchant is a live discussion, as the pandemic exacerbates underlying pressures which in turn accelerates trends. 

The Hub brings increasing agility and greater operational certainty. The nirvana of retailers transacting at close to zero marginal cost is a world away from being realisable, but in the meantime the goal of delivering operational excellence will be driving the independent wine industry and driving us as the industry business operating system provider of choice.

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How 10 wine businesses went digital this summer

The independent wine industry had been gradually going digital before Covid struck; the shift in consumer behaviour that subsequently occurred to online over the last few months was striking, with the best positioned businesses experiencing high double-digit growth. 

Events can act as a tipping point for long-term trends. Lockdown has been that tipping point for the fine wine market; merchants and retailers will need to quickly adapt in order to compete in a fast-evolving world. How they adopt new technology and shift to new platforms will be a key determinant of future success.

How 10 wine businesses went digital this summer

The easy way to save time and “go digital”

Now there’s an affordable, best-in-class option. In May 2020 Wine Owners released the Hub, a business operating system (also known as an ERP) designed exclusively for the independent wine sector. And because the Hub was designed to be Cloud-based Software as a Service (SaaS), there are no upfront software costs and no minimum contract period.

The Hub excels at management of all types of wine inventory and information (the complex bit), takes care of your main business processes and helps you to develop operational excellence. That means you can carry on business just as you do today, but in a more efficient way and in the knowledge that you’ll be able to more effectively track every purchase order and sale. 

How many times have you heard wine businesses say “our ecommerce is taking rather longer to build than we had expected”? Going digital is made easy with the Hub Webshop, an out-of-the-box ecommerce option that enables you to develop online sales. It’s setup to be fully integrated with the Hub, and because the Hub is built around wine product data, it’s easy to build an engaging experience for your Webshop visitors with content that helps them buy. 

It’s the affordable and sure way to move your business to digital and sell wine online.

The Hub Webshop | How 10 wine businesses went digital this summer

In the space of 12 weeks this summer 10 companies adopted the Hub

Here is what two of the first have to say:

Gilles Corre, Founder and CEO of Asset Wines, a fast growing fine wine merchant and importer, was the first to adopt the Hub at the start of May 2020. 

Gilles commented, “the Hub works beautifully out of the box for wine merchants. We see this as a long-term solution which meets our immediate requirements, but we’re also excited that it offers a tremendous roadmap that addresses our industry’s needs. It will allow us to grow and evolve.”

“As far as day to day operations are concerned, we appreciate being able to view our entire stock wherever it is in real time, which was incredibly challenging before we went onto the Hub. We love it.”

Ludovic Surina, Private Client Director at Mr Wheeler, the independent family-owned wine merchants, added:

“The Hub revolutionised the efficiency of our order processing; intuitive, a perfect fit with our needs and with a brilliant dashboard to manage orders from inception all the way to payment and delivery. The cherry on the cake is the ability to take orders on a tablet or a phone – perfect to stay on top of purchase or sales orders even while on the move!”

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New, first of a kind, digital operating platform for the independent wine sector set to power growth

The Hub provides the basis for fine wine merchants, retailers, brokers and importers to strengthen and grow their operations with a software platform capable of improving current operations and opening up new market opportunities.

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Wine Owners today announces the beta release of the Wine Hub, a state-of-the-art, first of its kind, business operating platform designed specifically for the independent wine sector. The release coincides with a period when the business of wine is rapidly going digital. Sales through websites have doubled during the second quarter of 2020.

The Hub provides the basis for fine wine merchants, retailers, brokers and importers to strengthen and grow their operations with a software platform capable of improving current operations and opening up new market opportunities.

The new platform builds on 8 years of wine industry-specific software investments. It leverages that expertise in wine inventory management and packages that know-how into an exceptionally flexible workflow management system that underpins purchasing and sales order processing.  This enables the Hub to deliver operational efficiencies and ensure on going operational excellence. It saves hours of time each week and unlocks the potential to significantly improve the client experience.

The Hub is the first Cloud-based ERP of its kind – a digital operating platform that realises new possibilities for independent wine businesses based around connectivity – with sources of supply and sales channels to market, as well as with best of breed services and plug-ins.

Main Hub features:

  • Built exclusively for the independent wine market
  • A large referential database, plus LWIN
  • Designed to make selling and sourcing more efficient
  • Easy to master and leverage the content that helps you sell
  • Deliver operational excellence and build customer loyalty
  • Saves hours of time every week

Gilles Corre, Founder and CEO of Asset Wines, a fast growing fine wine merchant and importer, was the first to adopt the Hub at the start of May 2020, and has been followed by a further 10 wine businesses in the intervening 12 weeks. 

Gilles commented, “the Hub works beautifully out of the box for wine merchants. We see this as a long-term solution which meets our immediate requirements, but we’re also excited that it offers a tremendous roadmap that addresses our industry’s needs. It will allow us to grow and evolve.”

“As far as day to day operations are concerned, we appreciate being able to view our entire stock wherever it is in real time, which was incredibly challenging before we went onto the Hub. We love it.”

Ludovic Surina, Private Client Director at Mr Wheeler, the independent family-owned wine merchants, added:

“The Hub revolutionised the efficiency of our order processing; intuitive, a perfect fit with our needs and with a brilliant dashboard to manage orders from inception all the way to payment and delivery. The cherry on the cake is the ability to take orders on a tablet or a phone – perfect to stay on top of purchase or sales orders even while on the move!”

Nick Martin, CEO of Wine Owners explains why the Wine Hub has got off to such a strong start. “The idiosyncrasies of the wine market, and its need for an exceptionally flexible approach to inventory management and associated buying and selling processes, means that for too long wine businesses have had to spend fortunes to bend generic business systems into wine shape. Either that, or they’ve got stuck on Spreadsheets or resort to using accounting software for inventorying, which entails massive compromises that ultimately holds back a business.

“We’re tapping into a global need for business improvement and digital readiness without ridiculously high entrance fees, and coming at it from a software as a service (SaaS) starting point. That means no set up fees, no minimum contract periods, free data migration tools and a beautifully fit for purpose platform that’s preloaded with industry-specific product reference data. All this gives us the ability to solve industry problems, support growth and help wine businesses to capitalise on market opportunities.”

For further information:

Wine Owners

Wine Owners develops software as a service (SaaS) platform solutions that are engineered from the ground up for independent wine businesses. We serve the needs of retailers, merchantswarehouses, the on-trade and other services businesses involved in fine wine.

We combine market specialism with a configurable, state of the art online SaaS platform that reduces cost of ownership, improves availability and security, and keeps you up to date with the latest version.

Nick Martin is CEO of Wine Owners, following a career in information management and technology marketing during which he worked for large brands such as Vodafone, BT, IBM, GEC and Disney to build their customer information databases and data-driven marketing capabilities. 

Nick co-founded Wine Owners with ex-Shell technologist and database expert Wolter Visscher, who had previously formed his own software house operating in financial services, health services and publishing.

Contact details:

Nick Martin

nick.martin@wineowners.com

Cellphone + (0)7828 170250

Clotilde Muller, Marketing Manager

Clotilde.muller@wineowners.com

Landline: + 44 (0)20 7278 4377

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What’s the right IT system for your business?

Nick Martin examines what type of investment wine companies should be looking to make to improve their back office, management and accounting support systems.

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As much as the fine wine market was gradually going digital, Covid-19 has made all businesses realise they need to adopt new technology with some urgency if they are to take any advantage of the boom there has been in e-commerce wine sales during lockdown. The pace of change has been so fast that some large wine businesses have been able to implement two year software plans in as little as two months, says Nick Martin, co-founder of Wine Owners, the fine wine digital support company. Here he examines what type of investment wine companies should be looking to make to improve their back office, management and accounting support systems.

– READ THE FULL ARTICLE HERE –

keyboard image with text "Wine Owners' Nick Martin: What’s the right IT system for your business?"

Read more: Nick Martin on how Wine Owners can help transform fine wine merchants

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Octavian

Octavian selected Wine Owners to deploy a client-facing, state of the art collection management platform, MyCellar portal, based on our market-leading software as a service (SaaS) wine management technology, and has transformed the online experience of Octavian private clients.

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Octavian is an exceptional heritage storage facility in a former WWII mine, handling and storing some of the world’s most valuable wines. It also contains one of the largest inventories of fine wine anywhere in the world: Octavian cellars cover the same area as eleven full sized football pitches. 

Octavian selected Wine Owners to deploy a client-facing, state of the art collection management platform, MyCellar portal, based on our market-leading software as a service (SaaS) wine management technology, and has transformed the online experience of Octavian private clients. 

MyCellar portal provides access to collectors’ Octavian-stored wines, allows for self-cataloguing of wines stored elsewhere, and makes it extremely easy for Octavian customers to buy and sell between each other in the Octavian trading exchange from within their account.

Requirements

Octavian’s needs were for a client-facing collection management solution that reinforced the care and meticulous approach they take to storing wines, and the consequent effect that can have on the attractiveness of ‘Octavian-stored’ wines in the secondary market.

It needed to provide consistency of wine descriptions, be really easy to use, and provide functionality for condition image requests, viewing images, and delivery requests. It also had to be incredibly intuitive for clients to offer their wines for sale with supporting pricing information that makes it easy to choose an offer price. 

The security and integrity of the system needed to be second to none, as rock-solid as Octavian’s own security in the storage of wine.

For thirty years Octavian have helped connoisseurs from around the world maximise the value and pleasure of their collections, and the new platform needed to reflect that history and those demanding service values.

Solution

MyCellar portal is specifically based on two SaaS ‘white label’ products from Wine Owners: private client reserves management and the trading exchange. MyCellar portal  is accessible to all Octavian private clients and provides secure access to their stored wines, along with intuitive collection management tools.

MyCellar enables private collectors to view, evaluate and track their collections with an unrivalled user experience, which Wine Owners has refined over many years with input from collectors.

The Octavian fine wine exchange operates as a 2-sided market where sellers and buyers connect to trade wine exclusively stored at Octavian. It’s a significant development in a fine wine market that is fast digitizing. 

By facilitating self-directed peer-to-peer trading, Octavian appreciated the strong desire of their collectors for ever more market transparency, control, and an end-to-end service that enables them to get the most out of their hobby or investment.

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Knight Frank – How valuable is fine wine as an asset class?

The first quarter numbers for the Knight Frank Fine Wine Icons (KFFWII) have just been crunched. So what do they tell us?

Focusing on the fine wine market, it’s once again proved remarkably resilient through the market turmoil of the first half of 2020. This begs the perennial question of correlation. Does the blue chip fine wine market track regulated investment market or does it have a mind of its own? How do currency movements effect the secondary market? What is a sound approach to portfolio building? These are the main factors discussed in the latest update of the Knight Frank Fine Wine index (KFFWI).

– READ THE FULL ARTICLE HERE –

Knight Frank fine wine

Also see KNIGHT FRANK – The Wealth Report 2019.

The Knight Frank Fine Wine Investment Index (KFFWII) is a custom-built index created by Wine Owners for Knight Frank in 2015. This index of 200 investment-grade wines has provided Knight Frank with detailed market data for the past Wealth Reports. The Knight Frank Wealth Report is arguably the most influential of its type and reflective of the behaviours of the world’s wealthiest individuals.

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Evolution of Fine Wine Systems – From ERP to DOP

In 2020 what makes a business software system effective? The ERP designs of the last 20 years are no longer fit for purpose, due to online being such a big driver of business growth. Business systems need to be more flexible and more connected. Enter the Digital Operating Platform (DOP), comprised of integrated solutions on a single platform capable of powering a business through the digital era. Flexible enough to respond to market opportunity and new operating models. Find out how the Wine Hub meets the success criteria for a DOP and can open up opportunities to develop your fine wine business.

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In 2020 what makes a business software system effective? The ERP designs of the last 20 years are no longer fit for purpose, due to online being such a big driver of business growth. Business systems need to be more flexible and more connected. Enter the Digital Operating Platform (DOP), comprised of integrated solutions on a single platform capable of powering a business through the digital era. Flexible enough to respond to market opportunity and new operating models. Find out how the Wine Hub meets the success criteria for a DOP and can open up opportunities to develop your fine wine business.

Forrester Research is a leading market research and advisory firm, with a track record of identifying technology trends. Forrester aims to provide a clear vision of the future so that businesses may move quickly and confidently to adopt the most appropriate technology for their needs.

If you are a wine retailer, merchant or wholesaler, we strongly recommend you read a recent Forrester report before making a decision on your next business system, entitled Look Beyond ERP: Introducing The DOP.

The report concludes that:

  • Most current ERP aren’t fit for purpose in today’s world where online activity is increasing and a driver of business growth. Traditional ERPs  fail to deliver the speed, flexibility, and intelligence necessary for today’s digital era.  
  • A new breed of ERP dubbed the Digital Operations Platform (DOP) is emerging, typically comprised of a series of integrated solutions. 
  • Approaches need to be more agile in responding to market opportunity or supporting a new line of business.

So why is it that classic ERP investments fail so frequently?

Poor customer experience capabilities 

Whilst the core of an ERP is designed to help a business become more efficient, that is simply the basic cost of market entry in the current state of the world – base competitiveness. ERPs lack the range of solutions that are designed to connect your clients to you. This may include, for example, providing customers with real time access to product and service data that relate to their relationship with you, along with actionable insights that can deepen engagement.

Lack real time insights that can drive business decisions 

This is hardly surprising since ERPs designed for all sectors rely on resellers to localize for a specific segment. Resellers are generally not information providers, and without the ability to intersect market data with a business’s micro-economic activity there is no insight. So for instance – a flag in a traditional ERP system indicating that a specific wine stock is running low is useful, but not informative – informative would be to know that this wine’s market price is rising and that your existing inventory could be sold for more than you are currently pricing it at. Without additional insights such as these, business decisions become hit and miss or opportunistic. 

Drag down the business with unnecessary complexity

Experienced systems architects know that you should ‘develop for the specific with an eye to the generic ‘. The leading ERPs develop for the generic with an expectation that resellers will be able to adapt common frameworks to make an ERP specific to an industry segment’s purpose. They do, but end up having to build in far too much complexity in order to get there. Have you ever looked at a data input screen and wondered why a third of the fields are irrelevant or confusing?  An early adopter of the Hub who migrated from a leading ERP had just that experience and it was a constant frustration. Unsuspecting businesses pay for that complexity twice over: once in a system that costs far too much to implement and maintain, and again in poor productivity hamstrung with illogical or difficult to adapt processes.

Lack of digital agility 

When a business gains momentum and starts its growth trajectory, things can move really fast.  That’s precisely the moment that a business operating system needs to be sufficiently agile to adapt. For example adding new sales and marketing channels, such as being able to send notifications to targeted customers about new offerings refined by the wines they have bought in the past, or hold today, or their current preferences. New features that enable businesses to create new revenue opportunities and that are integrated from the start.  

Hub as a wine-specific digital operating platform (DOP) 

The Hub ( www.hub.wine ) is a digital operating platform ( DOP ) for a fine wine business. It meets the Forrester success criteria of what makes a business system fit for the digital age and makes it possible to adapt to market opportunity rapidly.

  • Forms part of multiple solutions operating on a single platform, underpinned with market data capable of delivering actionable insight, such as how to optimize your margin by analyzing current retail market offers. 
  • Designed to create an ecosystem of integrated supply wherever stocks are best sourced from and to connect up to multiple customer and market channels.
The Hub ERP
The Hub ERP - Market channels
  • Integrates key industry digital partners such as Livex to expand your sourcing bench strength and opens up a B2B market fully integrated with your inventory management.
  • Hub Webshop makes data mastering and the use of rich content accessible and (more importantly) easily manageable to businesses of all sizes and delivers a faultless ecommerce customer experience. 
  • Best of breed collection management platform engages fine wine clients, and prompts increase in spend through up-sell and cross-sell.
  • It facilitates the creation of multiple income streams through self directed brokerage, consignment and trading exchange models.

The Hub Digital Operating Platform enables wine businesses of all sizes to level up and benefit from the changes that will doubtlessly create substantial new opportunities and winning companies as we step through 2020 and beyond. 

If you’re looking for an ERP, look again, for a DOP engineered for agility, flexibility and growth. 


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Leading storage provider Octavian deploys new customer platform powered by Wine Owners

Wine Owners provides software solutions for more than a dozen fine wine warehouses worldwide. Octavian is the latest, and largest single-site, wine warehouse to embrace the technology with the launch of a new service called MyCellarportal.

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Octavian Corsham wine cellar
Picture: octavian.co.uk

Wine Owners provides software solutions for more than a dozen fine wine warehouses worldwide. Octavian is the latest, and largest single-site, wine warehouse to embrace the technology with the launch of a new service called MyCellarportal. MyCellarportal includes a peer-to-peer exchange that operates as a 2-sided market where Octavian private clients can buy and sell Octavian-stored wines between each other. It’s a significant, empowering step in a fast-digitising wine market.

This week Octavian, one of the largest fine wine storage operators in the world, has launched a major new service called MyCellarportal – a client-facing, state of the art, cloud-based solution for collection management.

MyCellarportal, based on the collection management software as a service (SaaS) platform created by Wine Owners, is set to transform the online experience of Octavian private clients. 

Octavian is an exceptional heritage storage facility in a former WWII mine, handling and storing some of the world’s most valuable wines. It also contains one of the largest inventories of fine wine anywhere in the world: Octavian cellars cover the same area as eleven full sized football pitches. 

MyCellarportal is accessible to all Octavian private clients and provides secure access to their stored wines, along with intuitive collection management tools. MyCellar enables private collectors to view, evaluate and track their collections with an unrivalled user experience, which Wine Owners has refined over many years with input from collectors.  

Octavian has built a reputation on providing perfect storage conditions for aging fine wine. With traceability of stored cases and a state-of-the-art photography studio, provenance is as good as it gets. Consequently, Octavian-stored wine has particular value in the secondary market, which private clients can now fully realize with the Wine Owners powered Octavian fine wine exchange that is integrated within MyCellar. 

The Octavian fine wine exchange operates as a 2-sided market where sellers and buyers connect to trade wine exclusively stored at Octavian. It’s another significant development in a fine wine market that is fast digitizing. By facilitating self-directed peer–to-peer trading, Octavian is recognizing the desire of collectors for ever more transparency, greater control, and an end-to-end service that makes it simple to get the most out of their hobby or investment.

Nick Martin, CEO Wine Owners commented:

“We are so very proud to have been selected by Octavian to transform their private client experience with market-leading online collection management and trading. The white labelled platform we have configured for the exacting demands of a major wine services brand further cements our position as a global specialist provider of fine wine software that delivers results and a rapid return on investment”.

“The reduced risk of movement, full insurance and verified provenance provided by the Octavian exchange allows for quick and secure trading and settlement 100 feet underground!” It is as safe as it is discreet.”

Read more: Solutions for Wine Storage Companies

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Inventorying best practise

With the most demanding of clients, and a desire to offer the best possible service in an increasingly competitive market, what identifiers associated with inventorying should a wine warehouse consider?

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PIcture of cases of wine stored in a warehouse

With the most demanding of clients, and a desire to offer the best possible service in an increasingly competitive market, what identifiers associated with inventorying should a wine warehouse consider? For most warehouses there’s constant pressure on space and the need to routinely consolidate. Whatever the size of the operation, the biggest challenge is inventorying. The consistency of data (wine descriptions) when inventorying is paramount. LWIN is fast becoming the common language of wine, making wine inventories interoperable.

We’ve seen most variations in practise, from no barcodes (also called license plates) and a simple location and box naming convention, to barcoding of individual bottles.

The best solution for you will depend on your business and customer proposition but whatever your business, flexibility must exist at the heart of how you operate.

Pressure on space

For many wine warehouses, there’s constant pressure on space, and where customers are allowed to pull bottles out of cases there’s a need to routinely consolidate cases. 

Barcoding the case and inventorying the contents of each pack is the most flexible solution in this case. This is so that cases can be consolidated, either one or more into another, or two or more cases into a newly created pack with a fresh barcode.

With the case barcoded and the contents inventoried on the system, bottles associated to the case (which in turn is of course allocated to a location), the warehouse operator creates the most flexible form of inventory.

So why would you choose to barcode bottles rather than cases?

Smaller warehouses or large cellars – typically related to an On Trade operation such as a private members club – will have a preponderance of mixed cases, boxes, drawers, fridges or racks. The container itself becomes the location, with the assortment of bottles inbounding and being pulled out of a container occurring at a fairly high frequency. Barcodes on the bottles help with billing assuming a degree of prior integration between the wine inventorying system and the electronic point of sale (ePos), which are scanned through ePos as bottles are consumed. 

Common rotations

Unlike their US counterparts, UK fine wine warehouses use rotation numbers and most are bonded, allowing wine to be landed and stored by an individual in a state of excise and sales tax suspension. An individual case will have its own rotation number. 

Pallets of cases of the same wine vintage that inbound and land at the same time (imported or purchased by merchants) may share the same rotation. Reconciliation processes are needed to ensure stocks on a single rotation in the warehouse tally with stocks owned by them and storage clients where allocated wines remain on the common rotation, so that any discrepancies are picked up and dealt with early on.

Referential wine data

Whatever the size of the operation, the biggest challenge is inventorying. Accuracy of inventorying on the inbound leads to less mis-picks later on, better client service and more accurate insurance valuations. Some warehouses split the inbound and landing processes that simply run a case count from the inventorying of wine that’s carried out by specialists such as ex-sommeliers. 

The consistency of the data when inventorying becomes important so that there’s no variation between descriptions of the same wine. To this end, a referential database is crucial to bring standardisation and greater accuracy to the inventorying process. Apart from the benefits of accuracy, speed of data entry and consistency, it looks far more professional and inspires confidence with clients. It also reduces the risk of client claims or arguments about which wine was inbounded into the warehouse in the first place.

Having a reference database limits variability of data entry, improves accuracy and speed of inventorying, keeps the list of wine names presented to warehouse staff manageable and less confusing, and ensures the client sees full depth of information against each of their wine entries. The days of wine storage being seen as a lowest-cost, lowest-denomination utility are coming to a close. Discerning wine collectors expect excellence.

With the advent of LWIN, the industry standard unique identifier for wine, the warehouse can adopt a common language with its retailer storage clients and private collectors alike were sources of supply use this standard that’s now becoming widely adopted.

By providing universal codes, LWIN works behind the scenes in businesses worldwide to make sure that everyone is speaking the same language about products. It’s free and easy to use – and always will be.

For further information see Liv-ex.

Wine Owners has integrated its referential database with LWIN and provides the most flexible approach to helping warehouses inventory inbounded wines using LWIN, contextual data and complementary strategies where required.

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